Question

The internal audit activity's responsibility for preventing fraud is to

A. Evaluate the system of internal control.
B. Exercise operating authority over fraud prevention activities.
C. Establish internal control.
D. Maintain internal control.

Answer 1

The internal audit activity's role in preventing fraud is to A)evaluate the system of internal control, not to exercise operating authority, establish, or maintain it.

Step-by-step explanation:

The responsibility of the internal audit activity in preventing fraud is to evaluate the system of internal control. This does not include exercising operating authority over fraud prevention activities, establishing, or maintaining internal control.

Instead, it involves a continuous assessment to ensure that the internal controls in place are adequate, effectively designed, and operating correctly to prevent fraudulent activities.

Effective internal auditing can indeed help bureaucracies to counteract their tendency to resist criticism, by providing an objective and professional review of procedures and operations from within the organization.